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Microsoft is expected to update its strategy for cloud-based ERP (enterprise resource planning) and CRM (customer relationship management) software on Tuesday during the annual Worldwide Partner Conference in Los Angeles.

The next update of CRM Online will be available in the fourth quarter, and customers with more than 100 seats will be able to get unified billing and provisioning for CRM Online and Office 365, the recently launched cloud productivity suite. "We're really sort of wrapping that up in a bow and delivering it," said Microsoft spokeswoman Jennifer Pollard.

CRM Online is also getting a social media makeover with the addition of real-time activity feeds that can be tracked both within the application and on Windows 7 mobile devices, she said.

Browser access for CRM Online will be expanded as well, with support for Safari, Firefox, and Chrome on both PCs and Macs, according to Pollard.

Microsoft is also planning to announce that CRM Online has now more than 30,000 customers and 2 million users worldwide, she said.

In addition, executives are expected to discuss Microsoft's plans to move its four Dynamics ERP suites to the Azure cloud service, starting with NAV next year.

Dynamics ERP has traditionally been sold strictly through partners, who help customers implement it on-premises or offer it in hosted form. Partners will still be able to host Dynamics applications after they become available on Azure, Pollard said.

Microsoft has also been pushing partners on the idea of selling value-added extensions to Azure-hosted Dynamics installations.

A number of new RapidStart Services, announced Tuesday, could help them do so. Partners can use the services, which are built with Azure, to "quickly configure and set up consistent and repeatable steps common across the life cycle of an ERP deployment," cutting down on implementation work and allowing them to focus on add-on services, Microsoft said.

There won't be a direct Microsoft sales force for Dynamics on Azure, according to Pollard. "We are definitely committed to the channel model," she said. "When we have a partner connected to a CRM Online sale, we extend the number of seats by 70 percent."

Microsoft arguably has little choice but to treat partners gingerly as it rolls out the Azure deployment option, since channel partners have long served as the company's "face" for customers out in the field and possess deep expertise in the many verticals covered by Dynamics applications.

Earlier this year at the Convergence conference, Microsoft released the "Dynamics Cloud Partner Profitability Guide," a document that explains how partners can adjust their business models for the cloud.

"For many partners today, consulting services represent over 80 percent of revenue. Much of this revenue comes from deploying the software solutions," it states. "As customers shift away from on-premises deployments full of billable hours toward more of a consumable utility, the ratio of revenue sources is likely to change. Because customers are becoming more sensitive to deployment costs, partners will need to determine which offerings can be packaged and sold as an annuity rather than as customizations."

However, if partners take the right steps, cloud-based ERP can lead to higher profits over time, the document contends.